Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 8, 2006 erstellt
Description:
We theoretically and empirically examine the role of the international takeover market in improving corporate governance standards across countries by curtailing dominant shareholder influence - globally, a principal source of agency risk. In our model, firms are privately informed of takeover synergies and suffer from dominant shareholder moral hazard. But in equilibrium, firms with superior growth-options cross-list in countries with active takeover markets - such as the US - and voluntarily dilute the dominant shareholder's ownership to credibly reduce their (equity-based) expected cost of acquisitions globally. Empirical tests using a sample of 364 foreign firms cross-listing in the US, primarily during 1990-2004, substantially support the main predictions from the model. In the post-listing phase, dominant shareholder ownership and post-listing dilution, along with other proxies for high growth options and strong governance mechanisms, significantly influence the hazard rate, the total number, and the financing mode of acquisitions globally